New mental illness criteria set to take effect in 2013 could fuel a spike in insurance claims and raise policyholders costs, an Australian industry professional claims.

Dr Doron Samuell, medical director of medical risk management company SR2 Health, argues that changes in the upcoming fifth edition of the “psychiatrist’s bible", the Diagnostic and Statistical Manual of Mental Disorders or DSM-5, would see an influx of new definitions and “lowering of thresholds" to claims on mental illnesses that could impact some Australian insurers’ bottom lines.

DSM-5, which is expected to kick in from mid May across the globe, will see doctors begin diagnosing mental illnesses and mood disorders against a new set of criteria.

Dr Samuell argued that new disorders including behavioural addictions to shopping, gambling and internet use and pre-diagnosing those at risk of future mental illness will see an influx of normal, healthy individuals being diagnosed with medical conditions.

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“As the claims threshold decreases, the cost will be incorporated in the premiums. The ability for people to insure themselves will diminish."

As psychiatrists begin to use DSM-5 criteria, it will become easier for patients to qualify for compensable conditions, Dr Samuell predicts.

DSM-5 will be the fifth edition of the Diagnostic and Statistical Manual of Mental Disorders by the American Psychiatric Association.

While new symptom additions have been made, the latest manual is also expected to introduce changes such as eliminating Asperger syndrome as a separate disorder, among other changes.

Dr Samuell said when the industry moved from adhering to the previous DSM-III to the current DSM-IV manual, there was an increase in lifetime prevalence of mental illness from around two in five people.

“With DSM-5... I think that’s going to be around three to four out of five prevalences. It leads to more claims, and will put pressure on the superannuation funds or the disability insurers to undertake more due dilligence because these claims are based on subjective systems," he predicted.

“Insurers need to be aware that the new diagnostic criteria could impact on their profits quickly and dramatically. And consumers should be aware that this will inevitably make insurance premiums more expensive," Dr Samuell said.

Dr Samuell is not alone in his concerns with DSM-5. In an opinion piece published by Bloomberg, psychiatrist Allen Frances - who is also a professor emeritus at Duke University School of Medicine - argued that the revised manual had been “extravagantly indifferent" to cost considerations.

The industry was already experiencing an inflation in psychiatric diagnosis and a hike in the use of expensive psychotropic drugs, Dr Frances, who was also chairman of the task force that produced the DSM-4 manual, wrote.

Extra diagnosis and added categories of mental illness would result in millions of new patients and billions of dollars in costs, he argued.